The Effect of Medical Advances on Insurance ... - Actuary.com

<strong>Medical</strong> Developments <strong>of</strong>
Underwriting Interest
Mark Skillan, M.D.
Munich American Reassurance Company
Southeastern Actuaries Meeting
June 21, 2007

• Developments <strong>of</strong> Interest in Infectious Disease
• Genes, Mutations, Disease and Risk Assessment
• Genetic Testing Regulatory Update
• Stem Cell Update
• Second Cancers In Cancer Survivors

Infectious Diseases
Tuberculosis
Hepatitis
Pandemic Flu

TB – Mycobacterium Tuberculosis
• TB most common cause <strong>of</strong> infection-
related mortality in world
• > 2 Billion infected (1 in 3)
• 8-99 million develop active disease yearly
• 2 million die yearly (1 in 8)

TB Death Rate
• 7% industrialized west
• 20% Central and South America
• 35-40% parts <strong>of</strong> Asia and Africa
• >50% parts <strong>of</strong> Africa (HIV)
• Developing countries 95% cases, 98%
deaths

TB Infection Cycle
• Exposure to symptomatic infected person
• Infection (silent) –> > positive PPD skin test
- usually not infectious
- treatment goal - prevent disease
• Symptomatic Disease -> > cough, weight loss,
fever, etc. – infectious stage
- treatment goal: cure disease
- lack <strong>of</strong> treatment: illness, contagion, death
- inadequate treatment: illness, resistant
TB forms arise, contagion, death

MDR-TB
• Multi-drug resistant form – first cases 1990’s
• 2/3 cases in Russia, India, China
• 500,000 cases in 2005
• Resistant to first line drugs (INH, Rifampin)
• Requires second line drugs – at least 18 months
• Second line drugs – less effective, more costly,
less available

XDR-TB
• Extensively Drug Resistant TB – 2005
• Resistant to INH, Rifampin plus also
flouroquinolones, , and one or more <strong>of</strong>
three injectable Rx’s
• 2-10% TB cases today
• Requires prolonged RX with 2 nd and 3 rd
line drugs
• Outcome variable – cure currently possible

TB Remains a Treatable Disease
• Objectives <strong>of</strong> <strong>The</strong>rapy
Prevent or Cure Disease
Curb Further Spread
Prevent MDR and XDR-TB forms
• Requires
Early accurate Diagnosis
Prompt curative therapy
Patient compliance with meds

Obstacles to Cure/Eradication
• Access to care - delayed diagnosis
• Incorrect medication selection
• Inadequate duration <strong>of</strong> therapy
• Patient non-compliance
• Cost/Availability Issues
• HIV prevalence in some areas
Results <strong>of</strong> Failure: uninterrupted cycle <strong>of</strong> infection,
more MDR and XDR cases

TB:Bottom Line
• Serious illness globally
• MDR and XDR problem likely to grow
• Controllable in industrialized countries
• New medical regimens and a vaccine are years
away
• Be aware <strong>of</strong> TB risk in international business
and in immigrants from high prevalence areas

Hepatitis A, B, C
• 1 in 3 in the US have been infected by
HAV, HBV or HCV
• Impact for insurers (all lines) is significant
and growing, especially for HCV

Hepatitis A (HAV)
• Spread by fecal oral route
• Mild to modest morbidity risk
• No chronic HAV infection known
• Limited/no mortality risk
• HAV vaccine 1995 plus better public
awareness -> > 84% decline in US cases

Hepatitis B (HBV)
• Spread by blood products or intimate contact
• Modest morbidity and small mortality risk with acute
infection
• 5-10% develop chronic HBV infection
- 370 million worldwide have chronic HBV
• Significant long-term morbidity and mortality risk for 5-5
25% with chronic HBV
- via cirrhosis, liver failure, liver cancer
- duration <strong>of</strong> chronic infection is key factor

Chronic HBV in U.S.
• 60,000 new HBV infections in US annually
• 5-10% become chronic, but…
• 1 million in US with chronic HBV

HBV Control Initiative in US
• Blood supply screening for HBV
• Universal precautions
• HBV Vaccine (1984) prevents infection
- for at higher risk groups (HCW(
HCW’s, , MSM, IVDU, etc)
- universal childhood vaccination - new
• <strong>Effect</strong>ive antiviral therapies to treat chronic HBV now
available and in use (interferon, ribavirin, , etc); cure rate
~ 50%
->> Dramatic decline in new cases (less chronic HBV)
but…

HBV Control Challenge in U.S.
• Chronic HBV now most commonly found in
immigrant populations from high prevalence
areas
- Many infected since birth or childhood
- Many unaware <strong>of</strong> chronic HBV status
- Long duration <strong>of</strong> infection by middle age –
at increased morbidity/mortality risk
- 1,000,000 cases chronic HBV in U.S. now
- 500,000 Asian/Pacific Islanders alone

HBV Endemic Areas
• Southeast Asia
• Pacific Islands
• Indian Subcontinent
• Japan
• China
• Middle East
• Parts <strong>of</strong> Southern Europe and Africa

Bottom Line – Chronic HBV
• US remains low prevalence country for chronic HBV
• Vaccination plus effective therapies intended to reduce
impact here
• HBV testing for cause (elevated LFT’s) ) among PI’s s no
longer commonly done – reasonable but…
• Chronic HBV among immigrants from high prevalence
areas should not be overlooked in risk assessment
• Screening for HBV may remain a cost effective tool for
persons born in high prevalence areas

Hepatitis C (HCV)
• Formerly known as non-A, non-B B Hepatitis
• Infection mostly via blood products
- 240,000 cases per year in 80’s
- Blood supply screening added since then
- 26,000 cases per year now
• 60-80% <strong>of</strong> those infected develop chronic HCV infection!
• 5 Million in US with chronic HCV disease
• Often silent

Impact <strong>of</strong> HCV
• Minimal to mild morbidity with acute
infection, minimal acute mortality
• Significant long term morbidity mortality
risk in 10-15% 15% with chronic HCV -
- late effects: cirrhosis, liver failure, liver
cancer
- Chronic HCV -#1 cause for live
transplantation and hepatoma in US

HCV: Challenges Ahead
• Large number <strong>of</strong> infections in 1980’s s and before
• Duration <strong>of</strong> chronic infection key to HCV
morbidity/mortality
• An aging infected population now 20+ years out
• Disease complications costs expected to peak by
2015
• Direct medical costs may reach $10.6 B USD
during 2010-2019
2019

Stopping HCV Progression
• Rate <strong>of</strong> liver fibrosis development can be slow, moderate
or rapid
• Limited ability to predict course at present:
- following LFT’s – not reliable for HCV
- serial liver biopsies: more definitive but
unpopular (cost, risk, pain, error)
- new FibroIndex (AST, platelet count, gammaglobulin
level) – may lessen need for biopsy for some
- determining viral genotype, following viral load are key
-> > Treat those progressing and/or likely to respond to Rx

Predictors <strong>of</strong> Response to <strong>The</strong>rapy
Primary
• Low viral load at
outset
• Genotype 2, 3, or 4 -
80% SVR after 24wks
(genotype 1 - 45%
SVR after 48wks)
Secondary
• Age at time <strong>of</strong> Rx
• Female
• Caucasian
• Normal BMI
• Absent co-morbidities

Bottom Line: HCV
• Chronic HCV an important disease in US
• Is <strong>of</strong>ten silent
• <strong>Effect</strong>ive screening is essential for insurers
• Major wave <strong>of</strong> HCV- associated morbidity/mortality is
building – prepare accordingly
• <strong>Effect</strong>ive therapies exist and are key to morbidity and
mortality reduction
• <strong>The</strong>rapeutic advances in short term (STAT-C, new
protease inhibitors) should improve Rx success rates but
will not likely be a silver bullet

Pandemic Flu

Business Continuity Planning 2007

Requirements for Pandemic
– A new influenza A virus must emerge
• H5N1 is a new influenza A subtype
– It must infect humans causing serious illness
• As <strong>of</strong> 6/12/07, 312 people infected with H5N1, 61% have
died
– Efficient and sustained human to human
transmission
• Not yet documented

Occurrence <strong>of</strong> Influenza Pandemics
and Epidemics
Disease incidence
Pandemic
Incidence <strong>of</strong> clinically manifest influenza
Mean level <strong>of</strong> population antibody vs A HxNx
Mean level <strong>of</strong> population antibody vs A HyNy
Epidemic
Interpandemic period
Epidemic
Epidemic
Epidemic
Pandemic
1 2 3 4 5 6 7 8 9 10 11 12
Time in years
Epidemic
Mean population antibody level
Introduction <strong>of</strong>
hypothetical
A HxNx virus
Significant minor variation in A HxNx may
occur at any <strong>of</strong> these points. Epidemics may
or may not be associated with such variations
Introduction <strong>of</strong> hypothetical
A HyNy (major new
subtype), variant A HxNx
disappears
Mandell, Douglas and Bennett’s Principles and Practice <strong>of</strong> Infectious Diseases, 5 th ed. 2000:1829. Modified from
Kilbourne ED. Influenza. 1987:274, with permission.

Infectious Disease Mortality in US 1900-2000
Mortality Rate per 100,000
1000
800
600
400
200
0
80
60
40
20
0
1970 1980 1990
1900 1920 1940 1960 1980
Year
Source: Armstrong et al, JAMA, 1999; 281:61-66

Major Determinants <strong>of</strong> Mortality
Rate in Pandemic
• Lethality <strong>of</strong> Circulating Viral Strain
• Ease <strong>of</strong> Transmission
• Size <strong>of</strong> Vulnerable Population
• Prevalence <strong>of</strong> Pre-morbid Conditions
• Rapidity <strong>of</strong> Spread
• Speed <strong>of</strong> Detection
• Accuracy <strong>of</strong> Diagnosis
• Adequacy <strong>of</strong> Prophylaxis and/or Treatment
• Accuracy <strong>of</strong> Death Certificates

Will <strong>Effect</strong>ive Human to Human
Transmission <strong>of</strong> H5N1 Occur?
Three scenarios possible:
1. H5N1 remains in birds, other animals
- fades in importance
2. Jumps directly from birds to humans
– Postulated to have occurred in 1918
3. Combines with other influenza virus and then to
humans
– occurred in 1957 (Asian) and 1968 (Hong Kong)
– Usually less virulent (partial immunity, etc.)

US Dept HHS Projections
Moderate (1957-like)
Severe (1918-like)
• 90 million ill (30%)
• 45 million outPt care
• 865,000 hosp care
• 128,750 ICU care
• 64,975 ventilator Pts
• 209,000 Deaths
• ? $18 Billion health care
cost
• 90 million ill
• 45 million outPt care
• 9,900,000 hosp care
• 1,485,000 ICU care
• 742,500 ventilator Pts
• 1,903,000 Deaths
• $180 Billion Health care
cost

Health Care Capacity Issues
• 700 fewer hospitals from 1993-2003
- 200,000 fewer acute care beds
- 425 fewer ER’s
• Nursing shortages in many areas is routine
• 50% <strong>of</strong> ER’s s already at or over capacity
• 33% <strong>of</strong> Hospitals already losing money
• On-time Delivery System for Critical Supplies
• Cost-cutting efficiencies limit “extra” equipment
* Net <strong>Effect</strong> True Surge Capacity Non-Existent

WHO stages <strong>of</strong> pandemic alert
Interpandemic phase
New virus in animals,
no cases in humans
Pandemic alert
New virus causes
human cases
Pandemic
Low risk <strong>of</strong> human cases 1
Higher risk <strong>of</strong> human cases 2
No or very limited human-to
to-
human transmission
Evidence <strong>of</strong> human-to
to-human
transmission
Evidence <strong>of</strong> significant human-to
to-
human transmission
Efficient and sustained human-to
to-
human transmission
3
4
5
6

Pandemic Business Scenarios
Stage
Business Continuity Issues
Human Infection
Economic <strong>Effect</strong>
3a
• Public & employee “awareness” –
current situation
• No person-to-person
transmission
• No measurable impact
3b
4-5
• Potentially distracting level <strong>of</strong>
anxiety among public and
employees
• Overseas travel restrictions imposed
by government
• 24 hour media coverage, elevated
concerns for personal/family safety
• Increase in employee absenteeism
• No person-to-person
transmission
• Person-to-person
transmission has occurred
overseas
• No measurable impact
• Overseas supply chains
interrupted
• Some decline in equity markets
6a
• Regional travel restrictions within U.S.
imposed by government
• Regional school & gov <strong>of</strong>fice closures
• Personal/family safety primary concern
• Sharp increase in employee
absenteeism
• Excess mortality rate based
on
1957 & 1968 pandemic
“moderate”
• Significant but short-lived
shock to equity markets
• Short-lived world recession
6b
• Widespread travel restrictions within
U.S. and around the world
• School & gov <strong>of</strong>fice closures
• Work becomes a low priority to most
• Employee absenteeism is the norm
• Excess mortality rate based
on
1918 pandemic “severe”
• Significant and lasting shock to
equity markets
• World recession for extended
period

Pandemic Planning
• Pandemics- not considered preventable at this
time – goal is to contain and reduce surge
peak(s):
- to effectively use resources available
• SOA: Insurers should lead planning efforts -
partner with government, communities,
hospitals, businesses and individuals in planning,
risk management and recovery –
- consider pro-activity an investment not an
expense

Genetics, Mutations and Disease
Genetic Testing Regulatory Outlook
Status <strong>of</strong> Stem Cell Research

Genetic Testing
• Hot topic in DC – S. 358 & HR. 493:
President willing to sign a bill
• Potential problems for risk assessment
depending on:
- definition <strong>of</strong> genetic test
- lines to be covered
- future legislative directions

Genetics
• Study <strong>of</strong> genes, the biologic unit <strong>of</strong> heredity, ->
Learn structure and biochemical function ->
Potentials ->
- determine how body works normally and
- what may contribute to or cause a disease
- what may affect a disease’s s course
- what may determine an individual’s s response to
therapy

Medicine <strong>of</strong> the Past

Medicine in the 21 st Century

Landmarks in Genetics History
• 1859 Darwin - Origin <strong>of</strong> Species
• 1865 Mendel – notion/rules <strong>of</strong> inheritance
• 1867 Meisch - DNA (nuclein(
nuclein)
• 1882 Meisch – chromosomes
• 1908 Hardy-Weinberg
Weinberg–population genetics
• 1940’s s Pauling – concept <strong>of</strong> molecular disease
• 1953 Watson & Crick – model structure DNA
• 1990 Human Genome project begins
• 2005 Complete sequencing <strong>of</strong> human genome finished

Gene Function

Mutations: Basis for Disease
• A change in DNA Code sequence in a gene
along a chromosome
• Can be silent, beneficial, deleterious
• <strong>Effect</strong> depends on scale <strong>of</strong> change and
area affected
- Large scale versus small scale
- Coding versus non coding region

Size Of Mutation

Causes <strong>of</strong> Mutations
• Errors in DNA replication process (accident
or chance)
• Mutagen effect
- UV, X-rays, X
Radiation
- chemicals that bind/react with DNA
- chemicals whose metabolites generate
reactive oxygen that damages DNA

How Mutations Arise

Beneficial Mutation

Mutation Repair
• Is the norm
• Complex biochemical repair mechanism
exists
• Routinely “pro<strong>of</strong> reads” the code, repairs
as needed
• Failure to repair -> > cellular dysfunction
medical illness, tumor, etc

Gene Studies
• Detects mutations
• Links mutations to disease manifestations
• Provides potential point(s) ) <strong>of</strong> intervention for
targeted therapies:
- gene repair (future)
- supplement deficient gene product
- counteract excessive gene product

Disease Cause Continuum

Single Gene Disorders
• Follows Mendelian laws <strong>of</strong> inheritance
- predictable disease incidence
• Little environmental contribution
• Well studied diseases, genetic tests available,
few in number:
- Hemophilia
- Sickle Cell Disease
- Huntington’s s Disease
- Cystic Fibrosis…..

Common Complex Diseases
• No clear Mendelian pattern <strong>of</strong> inheritance (not
directly predictable)
• Genetic and environmental contributions likely
• Variable penetrance/expression
• Occurrence <strong>of</strong> protective and susceptibility genes
• Familial aggregations may be seen
• Includes most <strong>of</strong> the common diseases we
underwrite:
CVD, CA, Schizophrenia, DM, HCVD, AD,
CVA, obesity,….

Familial Aggregation

CVD - A Common Complex Disease

Recent Testing <strong>Advances</strong>
• Breast Cancer: MammaPrint – measures 70 gene
markers in tumor – score predicts likelihood for
recurrence in 10 years in Stage I or II node
negative breast Ca
• Leukemia: newly discovered 13 gene MicroRNA
expression pr<strong>of</strong>ile (signature) in CLL indicates
prognosis (time from diagnosis to need for
treatment); may clue pathogenesis as well

Genetic Testing Regulatory
Challenge: Perception vs. Reality
• Except in rare single gene disorders, a genetic
mutation <strong>of</strong>ten does not = disease
• Most common disorders are multi-factorial and
<strong>of</strong>ten can be favorably influenced by early
diagnosis, treatment and/or behavioral changes
(CAD, DM, BRCA-1/2)
• All <strong>of</strong> us likely have one or more such mutations
• Genetic testing not cost effective for insurers for
single gene or common complex disorders

Challenge: Should Private Insurers
Have Access to <strong>Medical</strong> History?
• Genetic discrimination not documented to be a
problem in private insurance market
• ADA (1990) and HIPPA (1996) address primary
concerns expressed plus
• State laws already address employment issues
(37 statutes) and health insurance issues (47
statutes)
• New legislation risks – a broadened definition <strong>of</strong>
a genetic test, loss <strong>of</strong> access to full medical
records, ? loss <strong>of</strong> family history, ? further
micromanagement <strong>of</strong> risk assessment to follow

Stem Cells
• Usual source is unused fertility clinic embryos
• Pleuri-potent or omni-potent embryonic cells
• Further development <strong>of</strong> these cells depends on
environment – hormonal, biochemical, etc.
• <strong>The</strong>oretical potential to generate cells to use to
repair or replace damaged or defective cells
• Current efforts stymied by ban on federal
funding <strong>of</strong> research on human embryos (Dickey-
Wicker Amendment, 1996)

Stem Cells
• Existing 20 stem cell lines old, problematic
• Federal funding greatly missed
• Privately funded and State funded
research ongoing
• Alternative ways to artificially produce
stem cells also being studied

Second Tumors in Cancer Survivors
• In Same Organ or Different Organ/System
Causes
• Genetic susceptibility – complex interplay
• <strong>The</strong>rapy-related
related – response to chemo and/or
radiation exposure
• Environment
• Behavioral factors – tobacco, alcohol, BMI,
stress, activity…

Childhood Cancer Survivors
• Survivors <strong>of</strong> certain cancers have lifetime RR <strong>of</strong> 10-20 for
second malignant neoplasm, e.g.,
- MOPP- associated leukemia (ANLL)
- radiation treatment-associated associated cancer <strong>of</strong> breast
(RR 14), thyroid, CNS, skin, sarcoma
-> > Other than recurrence <strong>of</strong> the primary tumor, a
second malignancy is commonest cause <strong>of</strong>
death among long term childhood cancer
survivors

Second Malignancies in Adults after
Hodgkin’s s Disease Treatment
2nd Site
Observed
Expected
RR
All cancers 747 195 3.8
Leukemia 116 5.2 22-95
NHL 112 6.0 18.5
Solid
Tumors
519 184 2.8-4.3

Second Malignancies After
Treatment for:
• NHL – RR 1.2 to 1.8 by 10 yrs
• Ovarian – RR 1.3 by 20 years
• Testicular – RR 1.43
• Risk varies: for some cancers the risk for 2 nd
cancer peaks a few years after initial tumor
treatment then declines, others - risk peaks at
~10 years out then declines, still others - risk
increases or remains stable over lifetime

Bottom Line- Second Malignancies
• Cancer treatment continues to improve…
• Growing population <strong>of</strong> survivors <strong>of</strong>
childhood and adult cancers ->
Growing population <strong>of</strong> persons at
increased risk for a second cancer
• Outcome with second cancer <strong>of</strong>ten
less favorable – high morbidity/mortality
• Limited data at this point for > 10-15 15 years
• More recent/current regimens may be less toxic

Summary
• TB a global issue; MDR and XDR worrisome
developments
• HBV significant world risk and in the US in immigrant
from endemic lands
• HCV-related morbidity and mortality on the rise
• For HBV and HCV diagnosis and treatment are key to reducing
morbidity and mortality risks
• Genetic testing regulation potentially pivotal for medical risk
assessment in the US
• Stem cell potential remains unrealized
• Be aware <strong>of</strong> growing population <strong>of</strong> cancer survivors who may
be at increased risk for a second cancer and early mortality

Thank you

Key Resources
www.pandemicflu.gov
www.cdc.gov
www.acli.com

Business & Personal Checklists
‣Planning checklist
‣ http://www.pandemicflu.gov/plan/checklists.html

Additional Pandemic Resources
• Society <strong>of</strong> Actuaries: Potential Impact <strong>of</strong> Pandemic Influenza on the
U.S. Life Insurance Industry, May 2007
• U.S. Dept Homeland Security Preparedness and Recovery Guide:
www.fsscc.org/reports/2006/CI_KR_Pandemic_Guide.pdf
• International / World Health Organization: www.who.int/en
• Europe: www.eurosurveillance.org/index-02asp
• European Centre for Disease Prevention and Control:
www.ecdc.eu.int
• American <strong>Medical</strong> Association: www.ama-assn.org
assn.org
• Insurance Information Institute: www.iii.org
• Moody’s s Special Comment Bird Flu Risk for U.S. Life Insurers: a Tail
event April 2007
• National Association <strong>of</strong> Securities Dealers: Notice to Members 06-31